Round One Shutdown: What We Know So Far

BALTIMORE–CMS posted the following statement about the delay of
competitive bidding on Wednesday:

The Medicare Improvements for Patients and Providers Act of
2008 was enacted on July 15, 2008. This new law has delayed the
Medicare Durable Medical Equipment, Prosthetics, Orthotics, and
Supplies (DMEPOS) Competitive Bidding Program. Items that had been
included in the first round of the DMEPOS Competitive Bidding
Program can be furnished by any enrolled DMEPOS supplier in
accordance with existing Medicare rules. Payment for these items
will be made under the fee schedule. Additional guidance regarding
this new law will be forthcoming.

How exactly does the agency plan to handle all that is involved?
Here is what we know so far:

–In a July 16 fact sheet, CMS said Medicare beneficiaries may
now use any Medicare supplier for DME. If a beneficiary changed
suppliers when competitive bidding started, they can either
continue to use the new supplier or choose another supplier. The
original DME payment rates in effect prior to July 1 are reinstated
retroactively.

–The agency said all Medicare households in the 10 round one
CBAs will be notified of the delay directly in a letter from CMS by
the end of this month. A posting on www.medicare.gov tells visitors that Congress
has acted to delay the competitive bidding program and directs
beneficiaries to a listing of local suppliers. “Medicare is
continuing to make sure you can get the supplies and services you
need,” the posting says. “We will post more information
about the new program in the future …We are sorry for any
inconvenience this has caused.”

–All information on competitive bidding has been removed from
both the CMS competitive bidding Web site (www.cms.hhs.gov/DMEPOSCompetitiveBid) and the
CBIC Web site (www.dmecompetitivebid.com). CMS told providers
to be aware that any published MLN Matters articles affected by the
new law “will be revised or rescinded as
appropriate.”

–Accreditation deadlines associated with round two of
competitive bidding have been cancelled, although the accreditation
deadline for all Medicare DMEPOS suppliers–Sept. 30, 2009–remains
in effect. (For more, see “2009 Accreditation Deadline
Stands” in this issue.)

–As a result of the new law, the mid-year 2008 Medicare
physician fee schedule rate reduction of 10.6 percent is
retroactively replaced with the fee schedule rates in effect from
January through June, 2008.

–The law also reinstated the therapy caps exceptions process as
of July 1. Therefore, medically necessary therapy services, in
excess of the therapy caps, will continue to be paid by Medicare in
accordance with the exceptions process. Claims submitted with the
therapy cap exception modifier will be processed as soon as the
payment rates have been activated. Claims submitted without the
modifier, and rejected or denied, can be resubmitted with the
modifier for reimbursement. More information on therapy caps is
available at www.cms.hhs.gov/TherapyServices.

–In addition to the facts coming from CMS, the American
Association for Homecare has been in talks with CMS about the
implications of the new law as it applies to DMEPOS.
Representatives from the group met with CMS officials last week to
“begin work on clarifying issues related to the delay in the
competitive bidding program,” and CMS has agreed to produce a
“Frequently Asked Questions” document for provider
use.

–A Friday afternoon update from AAHomecare said CMS had held
its first educational conference call earlier in the day on how the
agency will implement the delay. According to the update,
CMS’ carriers will reprocess any claims impacted by
competitive bidding between the dates of July 1 and July 15,
2008.

–The association also said CMS will look into issues related to
the repeal of the oxygen equipment transfer to beneficiaries
enacted in the new law, including issues of maintenance and service
payments that occur once the 36-month rental cap is reached, and
“respond soon.” –AAHomecare said CMS plans to hold a
provider call to answer questions related to the ending of round
one “in the near future.”

For now, AAHomecare pointed out the following important facts
for providers to note:

• The cost of the competitive bidding delay will be offset by a
  nationwide 9.5 percent reduction in current payment rates for round
  one DME items, effective Jan. 1, 2009.
• The law repeals transfer of ownership of oxygen equipment that
  was enacted in the Deficit Reduction Act of 2005. After the 36th
  continuous month during which payment is made for oxygen equipment,
  the supplier will continue to maintain ownership of the equipment.
  Payments for oxygen contents will be made after the 36th month.
  However, rental payments for oxygen equipment are still subject to
  the 36-month cap. Maintenance and servicing payments after 36
  months are still under development by CMS.
• The law terminates contracts under round one and will restart
  the contracting process in 2009, delaying program implementation
  for 18 months. The round two contracting process begins in 2011.
  Payment adjustments in non-bid areas may not take effect until
  round two is completed.
• In 2010 through 2013, all items would receive a Consumer Price
  Index (CPI) update.
• In 2014, items that had been subject to the 9.5 percent
  reduction would receive an additional 2 percent update over the CPI
  except in areas where competitive bidding contracts are already in
  place.

More details are available in a full summary on the AAHomecare Web
site at www.aahomecare.org.